WSJ has a nice round up of quotes re: this mornings GDP number — general expectations were for GDP break 6% in the Q3, but the 7.2% rate reported Thursday was out of the ballpark:
“There is no way to make this [GDP] number bad, even if you want to.”
— Steven Poser, president of Poser Global Market Strategies“This is a gangbuster number. Everything came together for the economy in the third quarter. … The key challenge now is jobs.”
— Mark Zandi, chief economist at Economy.com“To date, strong growth has not added many new jobs. We may be on the verge of change. Businesses are adding new equipment, indicating expectations for production gains in the US. … So far, productivity gains have managed to fill the gap on weak employment trends, but 6%-7% productivity gains are not viable longer-term.”
— Stephen Gallagher, U.S. chief economist at Société Générale Group“I’m floored. This really tells us that all the pieces are now falling into place.” The GDP report made “the equity market a little nervous — nervous that the ‘considerable period’ [the Fed said rates would remain low] is going to be shorter than expected.”
— Anthony Chan, chief economist at Banc One Investment Advisors“This report provides further confirmation that the real recovery has begun. The economy was firing on all cylinders from the demand side in the third quarter. Importantly, business-equipment spending continues to strengthen while the strength of nominal GDP growth and productivity gains points to even stronger gains in corporate profits. We see growth remaining significantly above trend in the fourth quarter and we continue to believe that the Fed can raise rates at the March 2004 FOMC meeting.”
— John Ryding, chief market economist at Bear Stearns“The key takeaway from the GDP report is that a sustainable demand-led expansion is taking hold. Another key point is that there was an enormous increase in productivity last quarter, that drove a strong rise in corporate profits.”
— Dana Johnson, head of research at Banc One Capital Markets“Consumer and capital spending growth were basically as expected in the quarter. The biggest upside surprise was a larger-than-expected narrowing of the net export deficit, which was the product of a 9.3% rate of gain in exports and a scant 0.1% increase in imports. … Looking ahead, it is probable that consumer-spending growth is going to cool off as the benefits of tax refunds and mortgage refinancings fade. … However, capital spending growth is likely to remain firm on the back of much improved corporate profits and stronger domestic output. Most important from the short-term standpoint, however, will be a need to boost inventories in order to replenish depleted stocks and to satisfy final demand.”
— Joshua Shapiro, chief U.S. economist, MFR Inc
